Microsoft’s ‘troubling exits’

This week’s Business Week cover story by Jay Greene is an exhaustive examination of the current state of Microsoft — looking behind the recent series of employee departures to explore the company’s disproportionate reliance on Windows and Office, its sluggish pace of major product releases, its layers of bureaucracy, and calls from inside and outside to institute reform.

Microsoft CEO Steve Ballmer responds in this Q&A, saying that employee morale remains high overall and that it’s good for the company to have a culture that encourages self-criticism: “We obviously can always improve. We’ve set high expectations for ourselves. But, man oh man, have we got an incredible pipeline of innovation coming in the next year.”

“Uh oh — I’m in Business Week,” writes Sean Blagsvedt, one of the two Microsoft researchers whose “Ten Crazy Ideas to Shake Up Microsoft” memo to Bill Gates was excerpted and cited in the story.

Microsoft employee Rob Chambers: “It’s true that Microsoft is a different company than it was 10 years ago, but it’s not as bad as what this article tries to make it out to be.”

Business Week’s Tech Beat Blog tells the story behind the story, and examines Microsoft’s top ranking in a survey of computer science graduates. How could that happen, given Google’s buzz? The search giant wasn’t among the pre-written choices given to students, but it still fared well as a write-in.

Investor Paul Kedrosky notes that Forbes is also running a cover story with similar themes this week, “Microsoft’s Midlife Crisis.” (Free registration required.) Kedrosky concludes that it’s a good time to buy Microsoft stock, given the big product releases coming up next year.

That link came via Om Malik, who observes that Microsoft is “in a street brawl with everyone from Sony, Nokia, Apple, and every tiny start-up that is coming up with new ideas. That is an energy sapping, tiresome battle on many fronts, especially at a time when the company is slowly becoming a collection of fiefdoms.” However, he adds, “I am loathe to bet against Microsoft. They just have too much money.”

Microsoft’s Robert Scoble: “Am I proud to work here at Microsoft? Yes. Is my morale high? Yes although there are definitely issues I’m working with management on that I’m hearing from around the company. The way we compensate people, for instance, is just not optimal. Is Microsoft becoming less relevant? I’ll let our customers answer that one. Is Microsoft a fun place to work? Absolutely.”

Meanwhile, some are reacting strongly to this vow by Ballmer in the story: “We won the desktop. We won the server. We will win the Web. We will move fast, we will get there. We will win the Web.”

Writes Molly Holzschlag, a steering committee member for the Web Standards Project, on her personal blog: “The Web is not a prize to be won, and Mr. Ballmer’s attitude is deplorable in the light of what the Web means to the world, to users, to designers and developers and to put it into Microsoft parlance, customers.” (Link via DL Byron)

Ballmer explains what he means by “win the Web” as part of the Business Week Q&A: “[W]e have to be best in class, not only in taking advantage of those devices that you hold or you type on on your desk, or that will end up on the server, but also those services that are out in the Internet itself.”